If a company uses the allowance method to account for uncollectible accounts, the entry to write off an uncollectible account only involves statement of financial position accounts.

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When using the allowance method, the entry to write off an uncollectible account involves crediting the Accounts Receivable and debiting the Allowance for Doubtful Accounts (both statement of financial position accounts), so the statement is true.

If a Company Uses the Allowance Method to Account for Uncollectible